Gas prices take off, but so will travelers

Despite pain at the pump, AAA predicts millions will take to roads and skies as summer season begins

May 27, 2011|By Jon Hilkevitch, TRIBUNE REPORTER

Thanks largely to an improving economy, the "staycation'' is not expected to make a roaring comeback this summer travel season, which officially kicks off over the Memorial Day weekend.

Compared with 2010, air travel is predicted to increase more than 11 percent nationally and at Illinois airports during the holiday weekend, according to AAA projections based on economic forecasting and research.

"The economy is continuing to turn around, and people are demonstrating their confidence with an increased willingness to spend,'' said AAA spokeswoman Beth Mosher.

Many people, however, are making their leisure travel contingent on finding a bargain.

"I'm excited about seeing the sun again,'' said Jennifer Hollandsworth, of Chicago, as she waited at O'Hare International Airport for a flight to Las Vegas, where she will spend the holiday and her 24th birthday with a friend and her parents.

Hollandsworth, who works at a chocolate shop, said the trip was made possible by her parents finding a bargain fare on Spirit Airlines, an ultra-low-cost carrier.

"My parents bought the tickets early for about $75 each way, so we will have money left over to see the 'Penn & Teller' show in Vegas,'' she said.

People are deciding to travel even though costs are rising. Gas prices in Illinois, which averaged $4.17 a gallon in the latest AAA survey, are $1.19 a gallon higher than a year ago.

Gas prices may soon climb higher over the short term across the region because of equipment problems at an ExxonMobil refinery in Joliet, AAA said. Wholesale gas spot prices in the Chicago market rose about 40 cents in the past week, the AAA said. The Joliet refinery is a major fuel supplier to the Midwest.

Meanwhile, air travelers who have booked flights for this weekend paid 14 percent more on average than last year's airfares, according to AAA.

Despite the higher prices, the slow arrival of warmer weather after a tough Midwest winter, coupled with the first three-day weekend in a while, appear to be another factor behind the heightened urge to hit the road.

"Six out of 10 people who intend to travel this holiday said gas prices will not affect their plans. The rest are adjusting their spending by traveling not as far, staying at less expensive hotels and skipping souvenirs,'' Mosher said.

More than 1.6 million Illinoisans will drive 50 miles or more from home over the holiday, a barely measurable 0.1 percent decrease from 2010, the AAA said.

In Indiana, where gas prices are on average $3.96 per gallon, or $1.20 a gallon more than this time last year, automobile travel is projected to grow 0.4 percent this holiday.

Will drivers be paying $6 a gallon for gas this summer, as some experts predicted earlier this year when unrest in Libya and elsewhere catapulted oil prices well past $100 a barrel?

A researcher at Purdue University thinks gasoline will likely stay below $4 a gallon in the months ahead.

"If crude oil stays below $100 a barrel, meaning there are no further production disruptions and we have no further weather conditions or other factors that cause refining outages, we have seen the worst,'' said Wally Tyner, an energy policy specialist at Purdue.

Still, higher gas prices are seriously affecting family budgets. The amount of household income in Illinois that is allocated to fuel each month has risen from 3 percent in April 2009 to more than 7 percent in April of this year, according to the Oil Price Information Service. The average monthly fuel cost per household in Illinois was $331 in April, it said.

While summer is the season that airlines depend on to rake in their biggest profits, consumer experts say good deals on airfares are still possible, despite recent price hikes and fuel surcharges.

The keys are to be flexible in your travel dates, take advantage of fare sales and book at least 10 to 14 days before traveling. Many airfare sales are introduced on Tuesdays and expire on Thursdays, so buyers who shop the airlines on weekends tend to pay a premium, the experts said. Traveling midweek is another way to save money.

"In summer the airlines go for the jugular, so the trick is to schedule your vacation around airfare sales,'' said Tom Parsons, chief executive officer of bestfares.com, a discount travel website. "If you can pack up the kids and go in June, do it. As we get into July and August, everybody wants to fly, and it will be expensive unless there is a deeper airfare sale.''

The Travelocity travel service said according to its bookings, theme parks and beaches are the top family destinations this summer. Orlando ranked No. 1, followed by Cancun, Mexico; Honolulu; the Hawaiian islands of Maui and Kauai; the Bahamas; Kona on the island of Hawaii; Puerto Vallarta; Turks and Caicos; and the Dominican Republic.

Planes will empty out in September when children return to school and airfares will drop, Parsons noted. He suggested that savvy travelers look to September and October for lower airfares to Europe for fall trips.

Flights announced this week for travel in the fall to Hawaii from Chicago have declined to as low as $440 round-trip. The fares are available from early September through mid-November.